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February 6, 2013          Get Health & Welfare News  |  Advertise  |  Unsubscribe
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401k Plan Administrator
for Doherty Employer Services in MN

Legal Assistant / Paralegal
for Peeples & Hilburn, P.C. in TX

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Webcasts and Conferences

COBRA Compliance for Group Health Plans
in Washington on April 11, 2013 presented by Thomson Reuters / EBIA

HIPAA Privacy & Security
in Washington on April 11, 2013 presented by Thomson Reuters / EBIA

Health Care Reform
in Washington on April 12, 2013 presented by Thomson Reuters / EBIA

ERISA Compliance for Health & Welfare Plans
in Washington on April 10, 2013 presented by Thomson Reuters / EBIA

Cafeteria Plans
in Washington on April 9, 2013 presented by Thomson Reuters / EBIA

A Prudent Process for Investment Manager Selection Webinar
Nationwide on February 20, 2013 presented by Multnomah Group

EBIA’s Full-Day Health Care Reform Seminar: A Webcast Re-Presentation
Nationwide on May 8, 2013 presented by Thomson Reuters / EBIA

HSAs, HRAs, and Consumer-Driven Health Care
in Washington on April 10, 2013 presented by Thomson Reuters / EBIA

US Equity as Compensation for a Global Workforce: Issues and Pitfalls (NY CLE Program)
in New York on February 14, 2013 presented by WEB (Worldwide Employee Benefits Network ), New York Chapter

Section 436 - Now and Future Webcast
Nationwide on February 27, 2013 presented by American Society of Pension Professionals & Actuaries (ASPPA)

View All Webcasts and Conferences


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[Guidance Overview]

Tax Aspects of In-Plan Roth Transfers
"This update is the second in a two-part series on the new in-plan Roth transfer provision. A previous technical update addressed the documentation and qualification issues relating to these transfers. This technical update addresses the tax rules of in-plan Roth transfers. As with the first update, we anticipate that the IRS will issue guidance affecting some of these issues, and that guidance may differ from our interpretations." (SunGard Relius)


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Text of DOL Amicus Brief on Applicable Statute of Limitations in ESOP Valuation Case
"Contrary to the court's premise, it was not enough that the plaintiffs knew the bare terms of the transaction (even assuming they had such knowledge). Under ERISA, they could not have had 'actual knowledge' of the defendants' imprudence unless they also had actual knowledge of infirmities in the fiduciaries' process, analysis, or reasoning for approving the transactions. Nothing in the disclosure documents that participants received, however, informed them of any such infirmities." (Employee Benefits Security Administration)

Pension Plans and Financial Institutions Unlikely to Achieve Assumed Investment Returns
"Pension plans and other institutions are not expected to achieve their target returns of seven to eight percent over the next 10 years, according to ... the BNY Mellon Investment Strategy and Solutions Group (ISSG) ... ISSG analysis derives an expected return of seven percent for U.S. large cap stocks and similar risk-adjusted returns for U.S. small and midcap stocks annually over the 10-year period. These returns are propelled by real earnings growth of two percent per year, a dividend yield of 2.25 percent and developed market inflation of 2.5 percent. ISSG noted that the two percent earnings growth projection is significantly below the near-term consensus of six percent annually." (BNY Mellon)

California Sues Standard & Poor's
"California Attorney General Kamala D. Harris filed a lawsuit against Standard & Poor's (S&P) for inflating its ratings of structured finance investments. Harris says S&P's actions caused California's public pension funds and other investors to lose billions of dollars. The complaint alleges that the McGraw-Hill Companies Inc. and Standard and Poor's Financial Services LLC violated the False Claims Act and other state laws by using a ratings process based on what senior executives described as 'magic numbers' and 'guesses.'" (PLANSPONSOR.com)

Delaware Pension System Looks Good -- and Not So Good
"In a new study from the Mercatus Center at George Mason University, senior research fellow Eileen Norcross looked at the $7.7 billion retirement system's nine pension plans two ways, using Delaware's assumed rate of return and a current fair-market value. Based on the retirement system's assumed return rate of 7.5%, the total unfunded liability of $1.03 billion puts the combined funding level at 81.4%. But when measuring the unfunded liabilities at a risk-free discount rate of 2.03%, which is the current yield on 15-year Treasuries, the funding ratio for all nine plans drops to 40% and unfunded liabilities jump to $11 billion." (Pensions & Investments)

From 'Buyer Beware' to 'Buyer Aware' -- Evaluating Guaranteed Income Solutions in DC Plans (PDF)
"From a plan sponsor's perspective, the choice of one guaranteed income solution over another can feel ambiguous, because it is difficult to properly value the features of each.... [This paper focuses] on how to quantify and compare alternative solutions in terms that matter to participants -- income terms -- in order to better align the selection process with what participants want." (Institutional Retirement Income Council)

Target-Date Funds and the Dispersion of Participant Portfolios
"The expanded use of professionally managed allocations is leading to reduced dispersion in participant outcomes. For participants in a single target-date fund during the 2006-2011 period, realized average returns ranged from 0.2% per year at the 5th percentile to 2.6% pr year at the 95th percentile, a range of about 2- 1/2 percentage points. For participants in a single balanced fund or in a managed account advisory service, the difference between the 5th and 5th percentiles was about two or four percentage points, respectively." (The Vanguard Group, Inc.)

Generating Retirement Income Still Eludes Many Advisors
"[A recent] study finds that advisors are challenged with attracting and engaging with investors who are retired or almost retired. They are also divided as to the best way to generate sustainable income, according to the report. Specifically, many advisors lack the skills to address basic issues like setting realistic expectations or educating investors on what retirement really involves. While most advisors are confident in their abilities to serve retirees, they have not coalesced around a common strategy for generating retirement income and many lack capabilities to deal with common topics such as Social Security, Medicare, or elder care." (Financial Planning)

Rethinking DC Plans As Struggling Americans Raid 401(k)s
"Americans who earn less are more likely to tap their 401(k) plans early for cash. Furthermore, many workers are stepping away from workplace plans altogether, according to other recent data. These trends, coming amid potential changes to Social Security, government budget pressures and the nation's growing wealth gap, are raising concerns about the potential increased risk of poverty facing Americans as they age and prompting calls for possible policy solutions aimed at low-earning workers. 'We need new plan types,' said Karen Friedman, policy director of the Pension Rights Center[.]" (Reuters)

DC Plans Snag a Bigger Piece of the Top 1000
"For the first time, defined contribution plan assets make up more than 30% of the nation's 1,000 largest retirement funds' coffers and more than a quarter of the top 200 plans' assets. Overall, total holdings of the top 1,000 retirement plans rose 12.3% for the year ended Sept. 30, to $7.534 trillion. The top 200 plans' combined assets jumped 12.1% to $5.566 trillion." (Pensions & Investments)

More U.S. Employers Likely to Add Roth Features to DC Plans in 2013
"While almost half (49 percent) of respondents currently offer no Roth provisions, 29 percent of those that don't offer Roth are very or somewhat likely to add this feature in the next 12 months. Of those new adopters, more than three-quarters (76 percent) will add both Roth contribution and in-plan conversion features." (Aon Hewitt)

FTSE350 Pension Deficits Jump by 13bn GBP During January
"[T]he estimated aggregate IAS19 deficit for the defined benefit schemes of the FTSE350 companies stood at 75bn GBP (equivalent to a funding ratio of 88%) at 31 January 2013. This compares to a deficit figure of 62bn GBP at the end of December 2012 (funding ratio of 89%). Over the month there has been a significant increase in market implied long-term retail price inflation which serves to increase the value of future pension liabilities. This has been partially offset by a smaller increase in corporate bond yields." (Mercer)

Funded Status of Typical U.S. Corporate Pension Rises to 81.2 Percent
"The funded status of the typical U.S. corporate pension plan soared 4.9 percentage points to 81.2 percent in January, its highest level since March 2012, as rising equities markets raised asset levels and higher interest rates reduced liabilities, according to the BNY Mellon Investment Strategy and Solutions Group (ISSG). Assets for the typical plan in January increased 3.0 percent as equities markets rose more than five percent in the U.S. and international developed markets ... Liabilities fell 3.2 percent as the Aa corporate discount rate rose 24 basis points to 4.13 percent[.]" (BNY Mellon)

S&P 1500 Pension Plan Sponsors Start 2013 with a Funding Improvement
"The aggregate deficit in pension plans sponsored by S&P 1500 companies decreased by $74 billion to $482 billion as of the end of January 2013 ... The funded ratio (assets divided by liabilities) improved 3%, up from 74% to 77% during the month. This deficit compares to an aggregate pension deficit of $557 billion on December 31, 2012 and is a slight improvement over the $484 billion deficit and funded ratio of 75% at the end of 2011. The improvement of the past month was driven by strong equity markets during the month which gained over 5% and an increase in interest rates of about 15 to 20 basis points, which reduces liabilities." (Mercer)

U.S. Institutional Plan Sponsors Gained 12.3 Percent in 2012
"Institutional plan sponsors reaped a fourth consecutive year of positive investment returns in 2012, with equity markets contributing a large portion to the 12.3 percent gain ... Corporate Pension Plans and Public Funds, with higher allocations to public equities, had stronger returns than the Foundations & Endowments segment in the 12 months ending December 31, 2012.... Public equities were again key to performance in 2012, ... returning 16.9 percent at the median for the year. International equity programs gained 18.2 percent at the median, while the median U.S. equity program gained 16 percent. The median private equity program, meanwhile, had a 10 percent return for the year, and total fixed income programs gained 8.8 percent at the median." (Northern Trust)

Sunset of PPA Rules in 2014 Creates Confusion for Multiemployer Pension Plans
"According to a study conducted by the DOL, IRS and PBGC, about 68% of multiemployer pension plans were in critical or endangered status, and thus subject to additional funding rules, in the 2009 plan year ... As a result of the sunset provision, multiemployer pension plans must consider the plan's circumstances in 2014 to determine which funding rules apply. The DOL, IRS and the PBGC have identified a number of technical issues that may make this determination difficult." (Bloomberg BNA)

Class Action Litigation Settlements and ERISA: What Does PTE 2003-39 Really Require? (PDF)
"To assess whether a plan should settle a claim, ERISA requires a decision-making process that considers each of the factors specified in PTE 2003-39, specifically: (1) the plan's likelihood of full recovery, (2) the risks and costs of litigation, (3) the value of claims forgone, (4) the scope of any claims release, and (5) the value of non-cash assets to be received by the plan, as well as factors that might reduce the plan's recovery, such as attorney's fees. The DOL expects that a value will be assigned to each of these factors, the weighting of which will differ depending on the type of case." (The Wagner Law Group via Bloomberg BNA)

Employer Retirement Plans Comparison Chart for Small Businesses: 2013 Plan Year (PDF)
"This chart provides a comparison of the features and benefits that apply to retirement plans that can be sponsored/adopted by small business owners. Focus on the areas that are important o the business owner, so as to help ensure that the plan that is chosen is the plan that is most suitable for the business." (Appleby Retirement Dictionary)

[Opinion]

Text of CalPERS Statement on California Attorney General's Lawsuit Against Standard & Poor's
"'We welcome the AG's efforts to hold S&P accountable for their rating methodologies that resulted in significant losses to California's public pension funds and other investors,' said Robert Glazier, CalPERS Deputy Executive Officer. 'CalPERS is a victim of S&P's wrongdoing, and a recovery from S&P will benefit the millions of public employees that rely on us for their retirement security. CalPERS is glad to have the federal and state governments on our side in these efforts to hold the ratings agencies accountable.'" (California Public Employees' Retirement System)

[Opinion]

Text of Comments to IRS on Notice Requirements for Funding-Related Benefit Limitations in Single-Employer DB Plans (PDF)
"We do not believe there should be a notice required when restrictions cease to apply. We expect that many plan sponsors will of their own accord communicate the lifting of restrictions to participants.... Notice 2012-46 imposes an earlier deadline for some notices related to unpredictable contingent event benefits (UCEBs) than the statutory deadline. We believe that the Notice should not accelerate the statutory deadline, and we also have specific concerns as to whether it is possible for plan sponsors to comply with the requirements of Notice 2012-46 in many cases." (American Academy of Actuaries, Pension Committee)

Benefits in General; Executive Compensation

[Guidance Overview]

2012 Q&As: SEC Meeting with ABA Joint Committee on Employee Benefits (PDF)
9 pages. Topics include: Use of Non-GAAP Measures in Executive Summary to Compensation Discussion and Analysis; Stock Option Modification in Connection With Termination of Employment; Reporting for NEOs; Bonus Payable in Stock; Reporting of Equity Incentive Plan Awards with Multi-Year Performance Periods. (Joint Committee on Employee Benefits, American Bar Association)

[Guidance Overview]

Deadline Approaching for Reporting 2012 ISO Exercises and ESPP Transfers
"If a company is required to file 250 or more of either form with the IRS, such filing must be done electronically. Otherwise, paper filing with the IRS is acceptable. For example, if a company is required to file 300 Form 3921s and 100 Form 3922s, the Form 3921s will need to be filed with the IRS electronically but the Form 3922 may be filed with the IRS in paper form." (Goodwin Procter LLP)

Press Releases

Randy Fuss Earns Registered Corporate Coach™ Designation
CPI Qualified Plan Consultants, Inc.

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